CRISC Loss Event Frequency (LEF) Practice Question
An organization is using the FAIR framework to perform a quantitative risk analysis for a data breach scenario. Which TWO of the following are components of the Annualized Loss Expectancy (ALE) calculation in FAIR?
⚠ Common exam trap
The trap is that candidates may select ARO, SLE, or EF because they are familiar from traditional risk analysis, but FAIR specifically defines ALE as LEF × LM.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Loss Event Frequency (LEF)
In the FAIR framework, Annualized Loss Expectancy (ALE) is calculated as Loss Event Frequency (LEF) × Loss Magnitude (LM). LEF represents the probable number of times a loss event will occur per year, and LM represents the probable magnitude of a single loss event. This differs from traditional quantitative risk analysis, which uses ARO and SLE. Therefore, the correct components from the FAIR perspective are LEF and LM.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Annualized Rate of Occurrence (ARO)
Why it's wrong here
Incorrect. Annualized Rate of Occurrence (ARO) is a component of the traditional ALE formula (ARO × SLE), not the FAIR framework.
- ✓
Loss Event Frequency (LEF)
Why this is correct
Correct. Loss Event Frequency (LEF) is a primary component of ALE in FAIR, representing the expected number of loss events per year.
- ✗
Single Loss Expectancy (SLE)
Why it's wrong here
Incorrect. Single Loss Expectancy (SLE) is used in the traditional ALE formula, not in FAIR. In FAIR, the equivalent concept is Loss Magnitude (LM).
- ✓
Loss Magnitude (LM)
Why this is correct
Correct. Loss Magnitude (LM) is the second primary component of ALE in FAIR, representing the probable loss per event.
- ✗
Exposure Factor (EF)
Why it's wrong here
Incorrect. Exposure Factor (EF) is a component of the traditional SLE calculation, not directly used in FAIR's ALE.
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